www.capelam.com.au/irm/Company/ShowPage.aspx/PDFs/2267-55133106/R...

www.capelam.com.au/irm/Company/ShowPage.aspx/PDFs/2267-55133106/ResearchReportFoster28October2011

These guys are Co-Lead Manager to the $50m equity issue being conducted by Glory Resources Ltd for the purposes of
acquiring the Sappes Gold Project. So would have detailed information on CFE (and possibly a little bias!)

Here's some highlights:


"Consistent with CFE’s business model, we expect a proportion of the proceeds from
Marampa and Sappes to be passed onto shareholders in some form, most likely via a
special dividend payment of potentially $0.10-$0.15 (~A$100m). Based on the current CFE
share price of $0.43/sh, this would represent a yield of >30%."

"We also highlight an A$80m receivable due from MCC relating to the acquisition of the
Cape Lambert Iron Ore Project in mid 2008. The terms of the acquisition at the time were
for a A$320m initial payment with a further A$80m due upon completion and granting of
mining approval or otherwise within 2 years. The case has gone through legal proceedings
with CFE now progressing to a forced mediation meeting with MCC followed by a Supreme
Court decision to be determined by February 2012 at the latest. We expect both parties to
reach settlement at the upcoming mediation, and consider A$60m to be a reasonable
estimate which would likely be paid through instalments over a period of 18-24 months."

"Our sum of the parts valuation of CFE is A$1.06, however we recognise the inherent risks
relating to the planned Marampa and Sappes transactions. Therefore we have applied a
subjective 30% discount factor to our valuations for these two assets to come up with our
risked valuation of A$0.86/share. West African iron ore represents ~80% of our total
valuation."

(Personally I don't take too much notice of broker valuations but do appreciate the research especially the MCC bit now we know a bit more about what's going on and when to expect a result)